Louisiana Repossession Laws: Your Rights When Facing Vehicle Repo
Louisiana requires written notice before repossession and limits how repo agents can retrieve your vehicle. You can prevent repossession through bankruptcy, negotiating with your lender, or voluntary surrender. Even after repossession, you may owe a deficiency balance if the auction sale doesn't cover your loan.
Get Payment HelpMany people need a loan to buy a car. When you finance a vehicle, you sign a contract agreeing to make regular payments. That contract gives the lender the right to take the car back if you stop paying. The car serves as collateral for the loan. Collateral means something of value the lender can seize if you default.
Repossession is legal in every state. Each state has its own rules about how the process works. In Louisiana, state law outlines what lenders can do and what rights you have when facing repossession.
Struggling With Your Car Payment? Get Help Before Repossession
Don't wait until after you miss two payments. Cambridge Credit Counseling can help you create a payment plan that works with your budget and potentially avoid repossession altogether.
Lower Your PaymentsHow Many Missed Payments Trigger Repossession in Louisiana?
In Louisiana, your lender can start repossessing after you miss two consecutive payments. If you make payments more often than monthly, you’re in default after 60 days without payment.
Your loan agreement may include more specific default terms. Read your contract carefully to know exactly when you’re at risk.
Will You Receive Notice Before Repossession?
Under Louisiana state law, your lender must send written notice before repossessing your vehicle. The notice goes to your last known address.
The repossession notice must include:
- Your name
- Your last known address
- A description of the vehicle
- The statement: Louisiana law permits repossession of motor vehicles upon default without further notice or judicial process
Depending on your loan terms, this may be your only warning. The law doesn’t specify how many days’ advance notice is required.
How to Prevent Vehicle Repossession
You can prevent repossession in Louisiana through several strategies:
- Filing bankruptcy: Chapter 13 or Chapter 7 bankruptcy may help you keep your car. Speak with a bankruptcy attorney for free to explore your options.
- Negotiating with your lender: When you explain you’re struggling with payments, your lender may offer a new payment plan.
- Purchasing wisely: Don’t agree to payments that stretch your budget. Make a down payment when possible and seek low-interest loans. These steps help prevent becoming upside-down on your loan.
Should You Voluntarily Surrender Your Car?
If you can no longer afford your car payment, you can return it voluntarily. People call this voluntary surrender or voluntary repossession.
Many lenders ask you to sign a form acknowledging the surrender. You’re not required to sign, but doing so helps you avoid repossession fees. Our partner Cambridge Credit Counseling can help you understand how voluntary surrender affects your overall debt situation.
Lower fees reduce the deficiency balance you’ll owe after the lender sells your car.
What Repo Companies Can Do in Louisiana
Louisiana repossession laws require repo agents to get a license from the state’s Office of Financial Institutions.
The repo company can only proceed without a court order if they can repossess without breaching the peace. They can’t use force, threats, or intimidation. They can’t break locks or force through fences to retrieve the vehicle.
While they can take your car from any public space, they can only take it from your property without breaching the peace.
You also can’t commit a breach of peace during the repo process.
What Happens to Personal Property in Your Car?
If you’re worried about repossession, remove all personal property from your car now.
If items remain in the car when it’s repossessed, you have 10 days to contact the creditor and demand their return. The creditor must return your belongings immediately.
If you don’t contact the creditor within 30 days, the property becomes abandoned. The creditor is no longer responsible for it.
What Happens After Repossession in Louisiana
After auto repossession in Louisiana, the creditor typically sells the car at auction. The sale proceeds offset the amount you still owe on the loan. If your car sells for less than your balance, you’ll probably pay the difference. People call this the deficiency balance.
For example, if your loan balance is $11,000 and the car sells for $8,000, you may be responsible for the $3,000 deficiency.
You are allowed to bid at the auction.
Do You Still Owe Money After Repossession?
You may still owe money after your car repossession in Louisiana. The amount due under your loan agreement may include attorney fees, court costs, repossession costs, and late fees.
If the auction sale doesn’t cover the remaining balance, the lender will likely try collecting the deficiency from you.
Voluntarily surrendering your vehicle makes these fees more manageable. But it doesn’t erase your loan or what you owe.
Can You Get Your Car Back After Repossession?
If your car has been repossessed and you want it back, contact your creditor. Ask what you can do to reclaim the vehicle. In some cases, they’ll let you redeem your car before it sells. You’ll need to pay the full balance you owe.
If you reach an agreement with your creditor, get everything in writing.
Additional Resources for Louisiana Repossession Laws
- LouisianaLawHelp.org provides information on auto repossession and resources for low-income residents to get legal assistance.
- Southeast Louisiana Legal Services provides legal assistance to low-income individuals regarding consumer protection issues.
- The Louisiana State Bar Association has a list of Legal Services Programs and Resources in the state.